More Tips for Managing an Inheritance

Carrying out the terms of a will can be a difficult process. With so many emotions involved, the acquisition of new assets may be the last thing on your mind. However, by forming the will, your late loved one took a great deal of time to plan these types of details. With that in mind, keep reading for a few more tips on how to handle your inheritance and honor your loved one's legacy.

Prepare for the Road Ahead

Some heirs may view their inheritances as “free money,” ready to be spent at a moment's notice. Though a spending spree may be tempting, remember that your new funds are just like the funds from your own paycheck: the product of financial discipline and hard work. Keep this in mind when you sit down to plot a course for your new financial journey.

Make a List. What needs to be done that wasn't financially possible last year? What financial moves would be in your best interest to make? Form a list, and keep the following financial tactics in mind. Then, prioritize your financial needs by ranking them based on importance.
Evaluate Your Debt. How much could you afford to pay off with your inheritance? If it's possible, eliminate credit cards, student loans, mortgages, and other financial liabilities from your life. Your inheritance could mean a new financial beginning for you and your family.
Put Some Aside for Later. Do you have an emergency fund? Having a financial cushion could mean a smaller financial crunch if an unexpected emergency or large purchase comes your way.
Plan for Your Future. Do you have a 401(k) or IRA retirement plan? Do you make regular contributions? Investing in your future and adding to the funds is an excellent way to manage your new money.
Arrange for Your Children's Education. Do you have children? You can ensure their academic opportunities by investing your funds for eventual college tuition payments. This will help relieve future stress by reducing your children's need for financial aid. You can read more about specialized educational savings plans in our Education section.

Seek Professional Aid

If you have any questions or would like more information about a particular investment plan, seek the help of a professional financial advisor. He or she can review your list and offer suggestions for ways to maximize your inheritance. Together, you can develop a plan that best suits your lifestyle.